As a curriculum specialist whose research centers on the use of literature with secondary and tertiary level Chinese EFL students, I'm a bit dismayed by some of the misperceptions out there concerning this approach.

Richard Day, an expert in extensive reading and professor in the world-renowned Second Language Studies Department at the University of Hawaii-Manoa dissuades us from use of the term "authentic literature." Who determines what is authentic? Carefully crafted graded readers, adapted works from the canon, and much young adult literature can and should be classified as literature worthy of instruction. He has coined a term for it: language learner literature.

I cringe whenever I hear teachers lament the lack of suitable literature or, worse yet, insist on teaching the "classics." Works not yet part of the canon have been called "contemporary classics," so what of it? The labels we attach to these materials reveals much about our teaching mindset and should compel us to call into question some of our assumptions about what constitutes good reading. Otherwise, a slew of worthy prose and poetry gets overlooked and our students are impoverished for it.

While Steinbeck and Hemingway are quite accessible, we can and should dig deeper. Before I began to pontificate, I'd like to welcome a robust dialogue on this issue. The very fact that this thread exists is an encouraging sign, so let's make the most of it!

Book 'em Danno! (Sorry, couldn't resist) But seriously, I agree with you on how it is a shame that too many potentially good and suitable books are, for what seem to be rather weak reasons, overlooked or ignored. For me, any work that sets my students a challenge and gets them thinking for themselves is worth its weight in gold. I feel that too little time is spent in considering what reading can do to increase not only the learners' awareness of language, but also on how positive an effect the whole experience of working with a real book in L2 can have. My adult students, often in what could more properly be called Business English settings get a real kick out of doing so - even if some of my colleagues wonder at the soundness of my judgement in developing this aspect of my courses.

the language learners literature that you refer to is really there to bridge the gap between 'authentic materials' and the stereotypical ESL textbook contrived writings.
The teacher who chooses to use literature in the ESL classroom needs to be very comfortable with it. Those who are using literature, I postulate, will be aware of the difficulties (lack of comprehension being one) and are unlikely to use the classics.
We need to rememeber that we are not 'teaching' the literature, but are using it as a language learning tool. After all, this is the business we are in.
The problem (and the probably reason for you being dismayed) is that EFL/ESL teachers are not au fait with literature. They do not feel comfortable using it as a tool for language learning and therefore tend not to.
The crusade to get literature into mainstream ESL/EFL is, in my opinion, up against it.